Daewoo Engineering and Construction Company, a South Korea-based engineering firm will restore production at the inoperative 110,000 barrels per day facility to at least 60% of its capacity by the end of 2024
Daewoo to repair Kaduna Refinery. (Credit: Tasos Mansour on Unsplash)
The Nigerian National Petroleum Company (NNPC) has awarded a $741m maintenance service contract to repair Kaduna Refinery in Nigeria.
NNPC has signed the contract agreement with Daewoo Engineering and Construction Company, a South Korea-based engineering firm.
Under the terms of the agreement, Daewoo will restore production at the inoperative 110,000 barrels-a-day facility to at least 60% of its capacity by the end of 2024.
The government has recently extended the expected date for the start of commercial operations at the Port Harcourt refinery from December 2022 to the first quarter of 2023.
The Kaduna Refinery is expected to start production by the end of 2024 and is estimated to produce 60,000 barrels per day.
NNPC said that the contract is part of the government’s efforts to reduce Nigeria’s over-dependence on imported petroleum products, which is Africa’s largest crude oil producer.
It currently imports all of Nigeria’s petrol needs mainly through crude-for-fuel swaps with local and international traders, with the resultant pressure on the country’s foreign exchange.
NNPC is expected to partially finance Daewoo’s work at the Kaduna Refinery and Petrochemical plant, which was commissioned in 1980.
In October last year, the NNPC and Daewoo signed a Memorandum of Understanding (MOU) to revamp the 110 barrels per day at Kaduna Refinery.
Daewoo Group is also currently undertaking rehabilitation works at the Warri refinery, which is expected to start commercial operations by 2023.
In August 2021, the Federal Executive Council (FEC) approved a total of $1.4bn for the rehabilitation of the Warri and Kaduna refineries.
The NNPC had already contracted Italy’s Maire Tecnimont to rehabilitate two of its refineries, with a combined capacity of 210,000 barrels a day, located in the oil hub of Port Harcourt.
The rehabilitation project is being primarily funded with a $1bn loan from the Cairo-based African Export–Import Bank, Afeximbank.
Furthermore, the federal government has purchased shares in four private refineries operating in different parts of the country.
The four refineries include the Dangote Refinery in Lagos, Azikel Modular Refinery in Bayelsa, Waltersmith Modular Refinery in Imo, and Duport Modular Refinery in Edo.